Blockchain glossary

Every term used in the course, in one or two plain sentences. Terms link to the lesson where they are explained in depth.

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Address: A short string derived from a public key that others can use to identify where a transaction should be recorded. It reveals no private information by itself. Learn more
AML (anti-money laundering): Laws and procedures that require certain businesses to check who their customers are and report suspicious activity. Learn more

Block: A batch of transactions bundled together with a header that includes the hash of the previous block. Learn more
Block header: The compact summary of a block: the previous block's hash, a fingerprint of the transactions, a timestamp and other fields used by consensus. Learn more
Blockchain: A shared record made of blocks, each linked to the one before by a hash, so that changing old data would visibly break the chain. Learn more

CBDC (central bank digital currency): A digital form of a country's money issued directly by its central bank. Most CBDC designs do not use a public blockchain. Learn more
Centralised system: A system where one organisation keeps the authoritative record and everyone else trusts it. Learn more
Consensus: The process by which independent computers in a network agree on one shared history of transactions. Learn more
Custodial: An arrangement where a service holds the keys on a user's behalf, so the user relies on that service. Learn more

Digital signature: A piece of data, made with a private key, that proves the key holder approved a specific message — and that the message was not changed. Learn more
Distributed ledger: A record kept in many copies by many participants, who follow shared rules to keep the copies in step. Learn more
Double spending: Using the same digital value twice. Preventing it without a central keeper is the core problem blockchains address. Learn more

Fork: A split in a blockchain's history or rules. Temporary forks happen naturally; permanent ones happen when participants adopt different rules. Learn more

Gas: On some smart-contract platforms, a unit that measures how much computation an operation needs, so that every operation has a cost and endless loops are impossible. Learn more

Hash function: A function that turns any input into a fixed-length fingerprint. A tiny change in the input produces a completely different fingerprint. Learn more

Immutability: The practical difficulty of changing data once it is deep in a blockchain, because every later block depends on it. Learn more

Ledger: A record of who owns what and of every change to it. Ledgers are thousands of years older than computers. Learn more

Mempool: The waiting area where a node keeps valid transactions that have not yet been included in a block. Learn more
Merkle tree: A tree of hashes that lets a single fingerprint represent many transactions, and lets anyone prove one transaction is included without seeing all of them. Learn more
MiCA: The EU's Markets in Crypto-Assets Regulation, which sets rules for issuers of crypto-assets and for crypto-asset service providers in the EU. Learn more
Mining: In proof-of-work systems, the repeated hashing that participants do to find a valid block and win the right to add it. Learn more

Node: A computer that runs the blockchain software, keeps a copy of the record and checks the rules. Learn more
Nonce: A number that miners change again and again in proof of work until the block header's hash meets the target. Learn more

Oracle: A service that brings information from outside a blockchain (such as the weather or a sports score) into a smart contract. Learn more

Peer-to-peer network: A network in which computers connect directly to each other rather than through one central server. Learn more
Private key: A secret number that lets its holder create digital signatures. Whoever has it controls what it can sign. Learn more
Proof of stake: A consensus method where validators lock up tokens as a security deposit and can lose part of it if they break the rules. Learn more
Proof of work: A consensus method where adding a block requires a large amount of computation, making it costly to rewrite history. Learn more
Public key: A number derived from a private key that can be shared freely and used by anyone to check signatures. Learn more

Recovery phrase (seed phrase): A list of ordinary words that encodes the secret from which a wallet's keys are generated. Anyone who has it can recreate the keys. Learn more

Smart contract: A program stored on a blockchain that runs exactly as written when someone sends it a transaction. Learn more
Stablecoin: A token designed to keep a steady value against something else, usually a national currency, typically by holding reserves. Learn more

Token: A unit recorded by a smart contract on a blockchain. It can represent many things — a voting right, a ticket, a membership. Learn more
Transaction: A signed message asking the network to change the shared record in a specific way. Learn more
Travel rule: A rule requiring crypto-asset service providers to send information about the sender and recipient along with transfers, as banks do for wire transfers. Learn more

UTXO: Unspent transaction output: in Bitcoin's design, a "piece" of value created by one transaction that can be used exactly once by a later one. Learn more

Validator: In proof-of-stake systems, a participant that proposes and checks blocks and has a deposit at stake. Learn more

Wallet: Software or a device that stores keys and creates signatures. It does not hold coins — the record of value lives on the blockchain. Learn more
Whitepaper: A document that describes a system's design. The Bitcoin whitepaper (2008) is nine pages long. Learn more

Zero-knowledge proof: A cryptographic method for proving a statement is true without revealing the information behind it. Learn more